True or False (please answer all 5)

Suppose the equity investment return rate decreases as an investor takes our larger debts. Then, it is called negative financial leverage. There are two investment projects with the same return rates (IRR). However, the contribution of IRR from operation is different: one is high and the other is low. Then, the former project is less risky than the latter. According to Leamer (2008), the contribution of residential investment in the US GDP growth is the highest among other components in the US GDP. As information technology develops, financial intermediaries can better discriminate the price of loans (or loan interest rates). Data shows that housing starts lead the number of new houses for sales. Suppose the equity investment return rate decreases as an investor takes our larger debts. Then, it is called negative financial leverage. There are two investment projects with the same return rates (IRR). However, the contribution of IRR from operation is different: one is high and the other is low. Then, the former project is less risky than the latter. According to Leamer (2008), the contribution of residential investment in the US GDP growth is the highest among other components in the US GDP. As information technology develops, financial intermediaries can better discriminate the price of loans (or loan interest rates). Data shows that housing starts lead the number of new houses for sales